Fwiw, and this might just be that you’ve thought about it more and I have and/or have details in mind that you haven’t specified. But it still seems to me that this runs into the problem that at least one party basically won’t have any reason to enter into such a bet, because their potential upside will be locked away long enough to negate its value.
I imagine that was one of the critiques for prediction markets using crypto currencies held in escrow, yet they exist now, and they’re not all scams, so there must be some, non zero, market clearing price.
I don’t think that holds up, because with traditional uses of prediction markets both parties expect to see the end of the bet. If it’s a long term bet then that would increase the expected payoff they require to be willing to bet, but there’s some amount of “money later” that’s worth giving up “money now” in exchange for. So both are willing to lock money up.
With a bet on the end of the world, all of the upside for one party comes from receiving “money now”. There’s no potential “money later” payoff for them, the bet isn’t structured that way. And putting money in escrow means their “money now” vanishes too.
That is, if I receive a million dollars now and pay out two million if the world doesn’t end, then: for now I’m up a million; if the world ends I’m dead; if the world doesn’t end I’m down a million. But if the two million has to go in escrow, the only change is that for now I’m down a million too. So I’m not gonna do this.
Fwiw, and this might just be that you’ve thought about it more and I have and/or have details in mind that you haven’t specified. But it still seems to me that this runs into the problem that at least one party basically won’t have any reason to enter into such a bet, because their potential upside will be locked away long enough to negate its value.
I imagine that was one of the critiques for prediction markets using crypto currencies held in escrow, yet they exist now, and they’re not all scams, so there must be some, non zero, market clearing price.
I don’t think that holds up, because with traditional uses of prediction markets both parties expect to see the end of the bet. If it’s a long term bet then that would increase the expected payoff they require to be willing to bet, but there’s some amount of “money later” that’s worth giving up “money now” in exchange for. So both are willing to lock money up.
With a bet on the end of the world, all of the upside for one party comes from receiving “money now”. There’s no potential “money later” payoff for them, the bet isn’t structured that way. And putting money in escrow means their “money now” vanishes too.
That is, if I receive a million dollars now and pay out two million if the world doesn’t end, then: for now I’m up a million; if the world ends I’m dead; if the world doesn’t end I’m down a million. But if the two million has to go in escrow, the only change is that for now I’m down a million too. So I’m not gonna do this.